'Nothing Is Written'... Survive in Advance

Published: Sept. 26, 2022, 7:30 p.m.

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Today\'s Stansberry Investor Hour guest is the man behind a theory that Dan says "scares the crap out of me when I think of foreign markets"...

We\'re thrilled to have Brent Johnson, the creator of the famous "dollar milkshake theory," on this week\'s episode.

A seasoned Wall Street veteran with decades of experience in finance and money management, Brent is currently the CEO of Puerto Rico-based Santiago Capital, a wealth management firm focusing on macroeconomic trends.\\xa0

Brent says most folks who have read or heard about his dollar milkshake theory think it\'s just about the U.S. dollar going higher. But he says there\'s more to this narrative... He explains how the Federal Reserve\'s switch to quantitative tightening is like a straw sucking up liquidity from markets worldwide \\u2013 strengthening the dollar. And it\'s a story that he says is playing out right now, with a soaring greenback and other currencies in a tailspin...

After the global financial crisis, governments and monetary authorities around the world were forced to provide incredible amounts of liquidity... They created this big pool of liquidity, and they kept doubling down on it and doubling down on it...

The world mixed this big milkshake of liquidity and capital that needs to go somewhere. But as we get further into this, it\'s going to cause a global sovereign debt crisis because the debts have just gotten too big. A lot of that capital is going to flow into the U.S. dollar \\u2013 or U.S. dollar assets \\u2013 and deprive that liquidity to the rest of the world.

As the dollar gets stronger, that attracts more capital and it also puts more pressure on the rest of the world \\u2013 which makes the U.S. even look more attractive on a relative basis and perpetuates more capital flows. The U.S. dollar is going to "drink the world\'s milkshake."

\\xa0With another clever analogy, Brent also explains just how much power the buck lends to America. There\'s a "rigged" poker game playing out where the U.S. has the upper hand \\u2013 and it has the "biggest stack at the table" with its currency. If any of the other countries "wins a big hand and tries to leave," Uncle Sam\'s "guards" at the door \\u2013 or the dollar\'s privilege as the world\'s reserve currency \\u2013 are ready to rob them of their profits. However, he says that the greenback could eventually plummet and end up in the same trouble that other currencies are undergoing... ultimately leaving gold as the "last man standing" at the table.

\\xa0Brent also shares which of his favorite movies served as the inspiration for his theory. And his takeaway for surviving this challenging economic environment should resonate with longtime Investor Hour listeners... It\'s all about preparing for even the most unthinkable outcomes and building a well-diversified portfolio \\u2013 or, as Dan always says, "Prepare, don\'t predict." And this time, Brent\'s cinematic muse is Lawrence of Arabia...\\xa0

Be prepared. Nothing is certain. "Nothing is written." Any of these ideas that you have that you think are absolutely foolproof, I would throw them in the trash can. Just open your eyes. Be ready for anything.

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